Antitrust: Commission
confirms sending a Statement of Objections to Alcan

The European Commission can confirm that it has
sent a Statement of Objections (SO) to Alcan on 21st February 2008. The SO
outlines the Commission’s preliminary view that Alcan has infringed EC
Treaty rules on abuse of a dominant position (Article 82) by tying its dominant
aluminium smelting technology with handling equipment sold by Alcan's subsidiary
ECL. This behaviour, if proven, risks limiting innovation in the aluminium
production sector and affecting competition on the €70 billion worldwide
market for aluminium, an important input for many parts of European
industry.

Alcan, headquartered in Canada, is the parent company of an international
group involved in many aspects of the aluminium, engineered products and
packaging industries. Its activities include bauxite mining, alumina refining,
aluminium smelting, manufacturing, recycling and related research and
development. Following the acquisition of Alcan by Rio Tinto in October 2007
(see IP/07/1434),
the merged entities' aluminium business "Rio Tinto Alcan" became the world's
biggest aluminium producer. ECL, a wholly owned subsidiary of Alcan, is the
major producer of equipment used in aluminium smelters in the world.

The SO concerns Alcan's contracts for the sale of its aluminium smelting
technology which provide that purchasers must also buy ECL's handling equipment
for aluminium smelters, the so-called Pot Tending Assembly (PTAs). As a result
of these contractual provisions, Alcan's customers appear to be prevented from
using PTAs from other suppliers. It is the Commission's preliminary view that
Alcan is dominant on the market for aluminium smelting technology and that this
contractual tie might significantly harm its customers and ultimately end-users
of aluminium, through reduction in innovation and likely negative impact on the
aluminium prices.

Background

A Statement of Objections is a formal step in Commission antitrust
investigations in which the Commission informs the parties concerned in writing
of the objections raised against them. The addressee of a Statement of
Objections can reply in writing to the Statement of Objections, setting out all
facts known to it which are relevant to its defence against the objections
raised by the Commission. The party may also request an oral hearing to present
its comments on the case.

The Commission may then take a decision on whether conduct addressed in the
Statement of Objections is compatible or not with the EC Treaty’s
antitrust rules. Sending a Statement of Objections does not prejudge the final
outcome of the procedure.

Alcan has eight weeks to reply to the SO, after which it will have the right
to be heard. If the preliminary views expressed in the SO are confirmed, the
Commission may require Alcan to cease the abuse and may impose a fine.